QUESTION 1When compared to domestic firms, MNC productivity is generally lower in services but higher in manufacturing. lower. higher. about the same.

When analyzing the productivity of multinational corporations (MNCs) compared to domestic firms, it is essential to consider various factors that contribute to productivity levels across different sectors.

MNCs typically benefit from economies of scale, advanced technologies, and access to international markets, which often enhance their productivity in manufacturing. This might result in higher productivity levels when compared to domestic firms in the same sector. In contrast, the service sector might not experience the same level of efficiencies due to localization needs, regulatory challenges, and the intangible nature of services that can often not be standardized or mass-produced. As a result, MNCs may exhibit lower productivity in services compared to domestic firms.

Thus, on balance, it can be concluded that MNC productivity is generally lower in services but higher in manufacturing.